What company has a flat structure?

Answer 1

The perfect flat structure is a one to many relationship between one person in charge and many subordinates. In reality this perfect structure is limited by numerical complexity, and by functional complexity.

Numerical complexity occurs when some amount of the network effect appears as interaction between subordinates. Sub1 and Sub2 begin working jointly, and a decision point appears. Sub1 and Sub2 have no authority to make the decision and therefore appeal to the single Leader. At this point, the flat organization begins to change from "one to many", to "one to many plus Subx,Subx interaction). The number of interactions can be as high as the number of Subs squared, so in theory a flat organization of just 20 Subs, can force the leader to determine decisions for 400 interacting Subs plus his own relationship to the 20 Subs. A perfectly flat organization runs the risk of not making enough decisions to operate the organization, which in turn limits the size the organization can grow to.

Functional complexity occurs when the qualitative properties of various job functions vary widely from each other and begin to require specialized decision making. Finance and Sales are functionally different activities and require different skills and backgrounds. Flat organizations run the risk of using general business skills to make functionally specific decisions, which in turn lower organization performance over time.